Portfolios need anchor stocks

The adage that you can’t escape death and taxes certainly applies in investing, only it’s risk and taxes.

There is always risk. And there are tax consequences when you sell stocks, so consult with an accountant about your exposure.

As the broader market tries to find a clear direction, there are stocks you can own that can mitigate short-term loss- es. That’s why you should track stocks and intimately know their movements. It gives you perspective on how a par- ticular stock behaves when the broader market is getting sold. And it enables you to find stocks worth holding long-term.

Look at Exxon Mobil Corp. and how it has performed over time. The only thing frustrating about Google Inc. is its price — $1,203 per share at this writing — because few companies have that bright of a future.

Real estate investment trusts are another way to minimize risk in your portfolio. They move slowly and pay dividends that you reinvest, giving you compounded earnings over time. REITs, by definition, must return at least 90 percent of taxable income to shareholders annually through dividends. Private companies have more autonomy with earnings.

You want a good portion of your port- folio, 60 percent or more depending on your risk tolerance, anchored by stellar companies like Google, Berkshire Hath- away (B shares are still affordable), Exx- on and REITs, knowing they will pro- duce solid returns over time.

These are investments you ride, not sell. That will enable you to take some risks trading other stocks that can produce good gains in a relatively short time.